From the sales executed so far we are noticing the dosage of EdenCrete used in applications is around 2 gallons per cubic yard. This I believe is 50% less than what EDE expected. Again, we only have a very small sample to analyse. If the same average is maintained we will need to sell twice the volume to match expected revenue.
We are also not aware of the operating costs for the new plant. So with approx $10m cash in hand after mid May (refer to investor preso), how long is this going to last if we have reduced sales? Most companies tend to secure funds before it becomes an immediate problem. So a CR is usually triggered before it becomes a necessity. If we wait for longer with the worst case scenario of reduced sales then a severe drop in SP will not help a CR at that time.
I am not a fan of diluting the shareholder value but the reality is you have to hit the set sales targets to avoid this. If CR is to raise money for operating costs then it also doesn't look good as opposed to say a potential expansion. This can further drive the SP down with negative sentiment.
The sales team will have to pick up the pace as we don't have an infinite bucket of funds.
CCAT
EDE Price at posting:
25.3¢ Sentiment: Hold Disclosure: Held
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